The senseless war that President Donald Trump chose to start with Iran has wreaked havoc on gas prices across the globe, but you already knew that. What has received less media attention, and something you may not be aware of, depending on what kind of vehicle you drive, is the even-higher price of diesel fuel. In fact, though average gasoline prices haven't broken all-time high records as of the time I'm writing this, diesel prices have already reached record highs in California, Hawaii, Washington, Nevada, Arizona, and North Carolina as of yesterday.
CNN Business spoke with Tom Kloza, an independent oil analyst and advisor to Gulf Oil, who said that the reason diesel prices are rising so much quicker than the rate of increase in gas prices is because diesel was already in short supply. So the situation was already dire, even before the man who ran on the platform of "America First" buddied up with Israel to start this war. The U.S. average price of gasoline is still over 85 cents away from breaking the record high prices of 2022, but the national average cost for a gallon of diesel is just 15 cents below the 2022 record, and that's a very bad thing for our wallets.
The extreme cold that affected much of the nation earlier in the winter meant that the American Northeast used more heating oil than usual, which is very similar to diesel fuel. This caused the shorter supply of diesel fuel, which has exacerbated the shortage.
As you likely know, almost all of the semi-trucks that deliver virtually every consumer good across our country run on diesel fuel. When diesel prices jump, trucking companies have to raise their rates to offset costs. And when trucking companies raise the rates, that price increase continues down the logistics chain. That, of course, ends up causing higher sticker prices for everything you buy.
How do your groceries get to the grocery store? Almost certainly via a diesel-powered truck. How does everything get to your local Walmart or Target? It probably got hauled there by a diesel-powered truck, but the need for diesel fuel goes even further.
Though container ships don't run on the diesel you can get at any old pump, their fuel is similar enough to diesel that its prices will increase, too. At least the price of imported goods hasn't recently gone up due to any sort of ridiculous tariffs or anything like that. Oh wait, they have. Most farm equipment relies on diesel fuel, too, so basically what I'm trying to say is, things are bad, and they're probably going to get worse. But look on the bright side! (Insert bright side here when one becomes apparent.)
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Diesel prices are just 15 cents from record highs, threatening to drive up costs for all consumer goods.
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Rising diesel costs will increase prices across the economy since trucks deliver virtually everything we buy.
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Cold winter weather increased heating oil demand, worsening an already tight diesel supply situation.
